shekhawati poly yarn ltd Management discussions

INTRODUCTION

Management Discussion and Analysis mainly comprises of the statements which inter alia involve predictions and projections based on perceptions and may, therefore, attract certain risks and uncertainties. It is the sum total of the Companys expectations, beliefs, estimates and projections which may be forward looking within the meaning of applicable securities, laws and regulations. The actual result could differ materially from those expressed herein specifically or impliedly.

The important factors that could make a difference to the Companys operations include availability and cost of raw material, cyclical demand and pricing in the Companys principal markets, changes in government regulations, tax regimes, economics developments within India and countries in which the Company conducts business, Indias Free Trade Agreements with other countries, prevailing exchange rate of INR against other currencies, availability of skilled and unskilled workforce and other incidental factors. The shareholders are cautioned to use this in conjunction with the Companys financial statements.

OVERALL REVIEW:

The Indian Textile Industry counts among the leading textile industries in the world. Apart from providing the basic necessities of life, its role in the countrys economic growth is significant. Indias textile industry contributes about 14% to industrial production; 4% to the countrys gross domestic product (GDP); 17% to its export earnings; and is a source of direct employment for over 35 million people, which makes it the second largest provider of employment after agriculture. Abundant raw materials, healthy foreign direct investments (FDI) and a government willing to invest ensures a bright future for Indias textile sector.

During the year under review, the Company was engaged in its own production as well as job work activities. The performance of the company was affected due to lower capacity utilization, fluctuation in crude oil rate in the international market which resulting in abnormal price movement in our main raw material, slowdown in textile industry in India as well as international market and non-availability of working capital fund which the company is facing since long time.

A. Industrial Structure And Development:

The Textile Industry has witnessed steady growth in the recent past. The Indian government has taken various initiative and steps to enhance textile Industries namely Scheme of Integrated Textile Part (SITP), Production Linked Incentives (PLI) and 100 % FDI under automatic route to support Textile Industries in the Country. The Union Ministry of Textiles is more active in developing the textile industry, by constant coordination with business owners of this sector.

Your Company work hard to meet the competition as well as to enable to maintain long standing business relationship.

B. Opportunity And Threats:

The economy is expected to improve its performance and the textiles industry is also likely to register good growth due to growing economy and domestic as well as international market.

The Indian textile industry has its own limitations such as accesses to latest technology and failures to meet global standards in the highly competitive export market. The changing government policies at the state and central government levels are also posing major challenges to the textile industry.

OUTLOOK:

The growth of Indian E-Commerce companies provides opportunities for the Indian textile industry in the domestic as well as international market. We expect the textile industry performance will improve in the next fiscal to encourage growth and overall demand in the market. The Company is hopeful of improved financial performance in the coming year and hopes to provide good results in the fourth coming years. There was no export during the year.

C. Risk And Concerns:

Risk taking is intrinsic to business growth. All business organization face risks either from internal operations or from external environment. The base of any business is a healthy appetite for risk. This is why one of the greatest and most important challenges for an organization is to define the optimal risk level for its business to ensure that its activities produce risk adjusted returns.

The risks for the Company is high cost of major input, viz. POY and intense competition in domestic and export markets due to large scale over capacity.

D. Internal Control System:

The Board has adopted system of internal control to ensuring the orderly and efficient conduct of its business, including adherence to the Companys Policies, the safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The management reviews the control systems and procedures periodically to upgrade them. Presently the internal control systems are commensurate to the size and operations of the company.

E. FINANCIAL & OPERATIONAL PERFORMANCE:

The performance of the company was affected due to lower capacity utilization, fluctuation in crude oil rate in the international market which resulting in abnormal price movement in our main raw material, slowdown in textile industry in India as well as international market and non-availability of working capital fund which the company is facing since long time.

The Company has incurred loss after tax of Rs. 2118.12 lacs as against a loss after tax of Rs. 2437.71 lacs in the previous year 2021-22. The turnover of the company was decreased from Rs. 36,478.37 lacs as to Rs. 30,369.37 lacs as compare to previous year 2021-22.

F. KEY RATIOS :

Sr.	Particulars	31st March, 2023	31st March, 2022
No.
1	Current Ratio	0.11	0.23
2	Debt – Equity Ratio	(1.37)	(1.60)
3	Trade Receivable turnover ratio	3.98	7.96
4	Trade Payable Turnover Ratio	4.34	11.22
5	Net Profit ratio	(6.97)	(6.68)

G. HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS:

The Company continued to enjoy harmonious and cordial relations amongst its entire employee. The key to the success of the Company lies in its people whose skills, expertise, and talent help the Company to achieve and sustain its market position. It is the peoples commitment, technical know-how, innovative ability and performance driven mindset that enable to react swiftly and creatively to the evolving customer and market needs.

Human resources continue to be an invaluable and intangible asset and key success factor for the Company to grow and sustain its market position in a highly competitive and challenging environment. Your Company firmly believes that people are the pivotal force behind the growth and excellence in business operations. Focus on developing leadership skills and building talent for the future and the process of improving organizational and human capability through competency mapping of managerial positions in all areas of the Companys operations, continued as a major initiative. The Company is committed to provide the right environment to its employees to work and to inculcate a sense of ownership and pride.

H. CAUTIONARY STATEMENT:

Statements in this Report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate, believe, estimate, intend, will, expect and other similar expressions are intended to identify such forward looking statements. The Company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of subsequent developments, information or events.